10 Ways to Keep Your Cryptocurrency Safe
Updated Mon, January 30, 2023 12:43 EST
Hackers over the years have been changing their strategies of attack and shifting the goalposts when it came to identifying the targets. As the prevalence of digital currency increases in our lives and also the mindboggling growth in their values, it is expected that attackers will gravitate towards cryptos now. Even when attackers took ransoms in fiat currencies, it was difficult to track their footprints; the digital currency will make it impossible. Also, victims will not have any legal recourse since the virtual currency is still unregulated by governments and central banks.
Here we will look at 10 ways to protect you in Cryptocurrency
1. Hybrid approach
One typically uses online wallets, and this attracts the attention of hackers. It is good to keep a significant portion in a physical or offline wallet, and a small amount of Cryptocurrency in the online wallet. The physical wallet should be kept in a safe deposit box having a public and private key. Both the key should have strong passwords and Multi- Factor Authentication. It will help keep digital currency safe until more traditional options come up in the future. One is responsible for keeping their digital currency safe.
2. Strong Passwords
Having a strong password with 2-factor authentication, using a Password Manager, utilizing password rotation wherever possible helps keep accounts safe. Also, one should not reuse the password across multiple accounts. Even though Cryptocurrency is a new technology, it is good to secure one's wallet with time-tested password security. Hackers will use the same guesswork to breach accounts, and one can assume that Cryptocurrency will not be immune to a data breach.
3. Work with reputable platforms
Any investor should only work with reputable exchanges, brokers, mobile apps, and wallets. One should not worry only about hackers but also look at the credibility of the intermediaries, platforms, and service providers. Look at the security features these platforms are providing. One should look at the multifactor authentication facility, SSL/TLS encryption. Using more than one cryptocurrency platform is recommended to spread out the risk and use a different complex password for each platform.
4. Protect from Phishing
Investors and traders use Mobile apps for keeping Mobile cryptocurrency wallets. The hackers keep track of the soaring prices of cryptos and target crypto wallets using the phishing method. The social engineering attacks on mobile apps include messages, email, or social media, which steal credentials. The malicious virus on the Mobile can identify the keystrokes on the mobile. Therefore, it is significant to keep secure mobile phones with antivirus software the way we do for our computers.
5. Keep an eye on your wallet
One should be aware of how their wallets get used in transactions. The wallet may be a code, but it holds a good value for the investor and the hacker. One should check how the process works with small transactions initially. It will give an idea about its security features and see if the networks are not compromised. The first thing should be to gauge the risk before doing high-value transactions. Hackers stage cyber-attacks. They first establish a foothold, expand, and then attack their target.
6. Understand the different process
Users must know the different processes of how cryptocurrency trading works. One must have the technical knowledge to operate this digital currency and keep it protected. Since any central bank or government does not manage this currency, the onus is on the investor ultimately to maintain its investment safe. In the event of loss after hacking, the chances to recover are nil. Therefore, investors must know about secret key operations, crypto-miner malware protection, and recovery seed protection.
7. Password sharing
The secret key validates the person transacting in digital currency. The private key is not for sharing. The secure way is to store private keys is by using cold storage. It means removing all digital traces by printing out the key. The safe method of recovery of a private key is to use seed, random series of generated words that users can write and store somewhere else. Hence, it will thwart the attackers who can access the device and its digital storage apps.
8. Do not use wallets by the providers
Many providers allow storing Bitcoin on the wallets hosted by them. It will enable them to control the user. These wallets are the worst choice as they allow providers to store users' private keys on their servers which are totally out of one’s control. People mistake using these wallets as it requires the least technical effort. It places the private key at several risks if there is a breach by the hackers of the provider platform or the provider going bust or taken over by a legal or government entity that makes investors lose control.
9. Cold wallets
Cold wallets are offline and have drawbacks for traders. It requires writing the private address on a piece of paper that only the investor has access to or purchasing a physical device that stores cryptocurrency funds securely. For traders, this can be cumbersome as they have to go offline and funds between the exchange and the cold wallet to do transactions. It is time-consuming and also incurs withdrawal fees for each transaction. The benefits of a cold wallet include peace of mind as the owner only has to access the funds.
10. Hot wallets
Hot wallets are faster and convenient for traders, but it has more risks. An online wallet means the retail investors and traders can be connected to the internet at all times and facilitate easier access, faster ability to trade and buy other cryptocurrencies more conveniently. Here, the risk of having both the public and private key can entail that hackers' breach of the crypto exchange can result in a loss of funds. Active traders should only use online wallets. Moreover, funds need to be evaluated all the time. Hackers usually target large exchanges where retail investors keep growing.
The cryptocurrency industry is evolving and still not mature like the fiat currency. At this point, when there is no central regulation or legal protection available, it is the sole responsibility of the investor to protect their digital funds by securing their wallet.